Late slide in financial stocks hits market
Associated Press
NEW YORK
Financial companies dragged stocks lower Monday as already anxious investors grew even more uncertain about the U.S. government’s financial-overhaul plan and debt problems in Europe.
The Dow Jones industrial average slid 80 points in the final 15 minutes of trading to end with a loss of almost 127. It was the lowest close for the Dow since Feb. 10. The Dow and the Standard & Poor’s 500 index fell more than 1 percent.
Investors are worried about limits that could be placed on U.S. banks in a final version of the financial-overhaul bill. A bill that passed the Senate last week is now being reconciled with the House version. The late drop illustrates how jittery traders are in particular about what will happen in Europe.
“People are afraid to go home and say, ‘All of the sudden what’s going to happen overnight in Europe? Is something new going to pop up?’” said Joe Saluzzi, co-head of equity trading at Themis Trading LLC.
The rescue of a Spanish bank raised investors’ uneasiness about Europe’s economy. Investors can’t shake their concerns that there could be more bank bailouts in Europe if a wave of bad debt cascades through financial markets.
It’s not clear that will happen, but traders remember well the problems in the U.S. that began with bad subprime loans. Those problems started small but eventually helped take down Lehman Brothers in September 2008.
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